While more Americans, about 9 million, are working later in life, retirement is still an inevitable stage in many workers’ lives. To some, the concept of retirement is daunting, ending the steady source of income. They are plagued with doubts like, “What if I outlast my savings?” Financially burdened by the pandemic, many older Americans do not feel confident relying on their Social Security to cover the bills.
Meanwhile, others enjoy their time at work, reaping the mental and social benefits. It also doesn’t hurt that while they continue to work, they can use the extra time to add to their 401(k). For the smoothest transition and high company morale, employers are encouraged to work closely with employees looking to retire.
About 65% of retirees claim they do not feel financially secure in their retirement, according to a survey. By offering guidance on finances and healthcare, employers can ensure employees are better prepared for their retirement. Employers can go the extra mile by offering support from a certified financial planner or in-depth planning consultations through HR.
Employers should also encourage employee contributions to their retirement fund. These contributions can be beneficial even if there’s no match available. Stopping the contributions to the 401(k) plan puts a damper on the time value of money that could have compounded over time. For employers who offer a retirement plan, use special features like auto-enrollment. Utilizing this feature gives employees the advantages of the benefits with little to no thought. Another feature, auto-escalation, increases employee contribution amounts each year. Both can provide employees a cushier nest egg for retirement.
By providing employees with different ways to feel more financially secure, employers are making their organizations more attractive and competitive. Employee satisfaction and retention increase when employers prove they are invested in their future and financial wellbeing.